Regional Daily, Maybank KE (2014-04-04)

Daily 04 April 2014 TOP VIEWS Tata Communications (TCOM IN) | Initiation China LotSynergy (1371 HK) | Company update Hong Kong Banks | Sector update Midas (MIDAS SP) | Company update Tata Communications (TCOM IN) Initiation: Riding on convergence of IT and telecom P3 Share Price: INR302 | Target Price: INR405 (+34%) | MCap (USD): 1.4B | ADTV: USD4.2M Initiate at BUY with TP of INR405 based on sum-of-the-parts. TCOM will be a key beneficiary of demand for 24x7 telecom infrastructure from new technologies like social, mobility and cloud computing. We forecast TCOM's EBIT to grow at 22% CAGR over FY14-16F following a successful turnaround. Strengthening of balance sheet through sale of assets is a near-term catalyst. Click here for report » China LotSynergy (1371 HK) Milestone partnerships on mobile lottery Share Price: HKD0.78 | Target Price: HKD1.00 (+28%) | MCap (USD): 754M | ADTV: USD31M Maintain BUY and HKD1.00 TP after company announced two milestone partnerships with Chinese banks on mobile lottery. We see CLS� new mobile lottery game business as the next share-price driver as we believe its mobile lottery game will likely receive MOF (Ministry of Finance) approval in 2014 and CLS� has built up a powerful mobile distribution platform through partnerships with leading Chinese banks and Chinese telecom operators. Click here for report » Hong Kong Banks Sector update Key takeaways from 2013 results � Cautiously optimistic 2014 outlook Moderate loan growth, stable NIM and credit costs in 2014. Tougher regulatory environment may prompt the sale of DSB. Maintain NEUTRAL with DSB and DSF as top BUYs. Click here for report » Midas (MIDAS SP) Positive changes afoot Share Price: SGD0.46 | Target Price: SGD0.75 (+65%) | MCap (USD): 439M | ADTV: USD2M China�s new round of high-speed rail investment and other impending developments in the industry bode well for Midas. Our projected three-year EPS CAGR of 73% and steadfast ROE expansion will be driven by operating leverage. The earnings turnaround story, starting from FY13, looks set to continue. Maintain BUY. Current low valuation of 0.9x FY14E P/BV provides a good entry point. Click here for report » COMPANY NOTES Puregold Price Club (PGOLD PM) | Results review Pruksa Real Estate (PS TB) | Rating change Erawan Group (ERW TB) | Company update Puregold Price Club (PGOLD PM) | Results review Growth story to continue in 2014F Share Price: PHP46.50 | Target Price: PHP50.00(+8%) | MCap (USD): 2.9B | ADTV (USD): 2M Maintain BUY with TP of PHP50 as 2013 results slightly ahead of our expectation. 27% net sales growth in line with estimate. Earnings up 46% with better than-expected net margin improvement. Store expansion, sustained margins to drive 2014F growth. Click here for report » Pruksa Real Estate (PS TB) | Rating change Good news priced in; d/g to HOLD Share Price: THB21.80 | Target Price: THB21.90(+0.5%) | MCap (USD): 2.9B | ADTV (USD): 2M Downgrade to HOLD from BUY with TP unchanged at THB21.9 pegged to 8.4x FY14 PE. Expect no upside surprise given rising household debt/GDP and weak consumer confidence from economic slowdown. On-going MoM presales recovery as expected; March�s presales up 102% MoM to THB4.6b led by all product segments. YTD presales of 8.2b account for 26% of our full-year presales target Share price up 20.4% since upgrade in Jan-14. Current valuation at 8.4x FY14 PE with flat growth no longer a bargain, in our view. Prefer AP and SPALI. Click here for report » Erawan Group (ERW TB) | Company update Toning down, but still w/n our expectation Share Price: THB4.02 | Target Price: THB4.50(+12%) | MCap (USD): 307M | ADTV (USD): 1M ERW cuts 2014 revenue growth to 2-5% from 10% due to political turmoil. Lower occupancy rate for eight hotels in Bangkok (55% in 1Q14 vs 82% in 1Q13). Maintain BUY with TP of THB4.50. Replacement cost is 20% above our DCF-based target price. Focus on �Hop Inn� budget chain, 10 openings in 2014 starting in Mukdahan and Nong Khai. In 2015, further 15 hotels to open in Thailand and five in Malaysia, Indonesia and Philippines. Click here for report »     Click here for full Regional Daily report »